This is iLife '09

Imovie 09 export-m4v files work in the Movies template page in iWeb (share > export movie)
To compress the mov file further, go to Share > Export using QuickTime. Click OPTIONS, then settings. Change to H.264, compressor quality to high and click ok. Click Size and change to 320 x 240. You may have to experiment since the recommended movie size on the iWeb template is 10MB.